IOTA

What is IOTA?

IOTA is a transactional settlement and data integrity layer for the IoT (Internet of Things). IOTA uses a newly distributed ledger called Tangle. Tangle is a new way of reaching consensus on the network. IOTA wants to become the public backbone for the internet of things.

IOTA is the first cryptocurrency where you can transfer money without paying any fees. That means even the smallest amounts can be sent. This is not possible with other cryptocurrencies like Bitcoin. Because fees must be paid, very small amounts cannot be sent.

Be aware that at this time of writing, IOTA is still in BETA. Meaning that the building is still in progress.

Mining algorithm

IOTA is a really something new in cryptocurrency world. IOTA does not use POW or POS. In fact, they use a very different consensus algorithm called Monte Carlo. There are no block times or block rewards. IOTA uses Proof of Work of some kind, but only when confirming transactions with zero reward. Consensus is reached by using the Monte Carlo algorithm.

So you could say that IOTA does not even have a blockchain. Instead, IOTA uses a directed acyclic graph (DAG). A DAG does not have any directed cycles. See the following picture for better understanding:

IOTA is quite advanced and is seen as the revolution in cryptocurrency.

What can you do with IOTA?

For now, IOTA is still in BETA. The main focus of IOTA is the internet of things. Where machines pay each other for resources, services or access. As a normal user, you can trade IOTA on most exchanges. Or hold the tokens for future use.